In a recent memo, Matt Hougan, Chief Investment Officer at Bitwise, provided a comprehensive analysis of the early adopters of Bitcoin Exchange-Traded Funds (ETFs) based on 13F filings with the SEC. His analysis highlights a notable embrace of Bitcoin ETFs by professional investment firms, signaling a potential shift in the landscape of BTC investments.
Since their launch on January 11, Bitcoin ETFs have amassed an impressive $11.7 billion in assets, marking them as the most successful ETF launch in the history of financial products. This remarkable debut has generated widespread curiosity regarding the identity of investors—whether they primarily consist of retail or professional investors.
Who Is Purchasing Bitcoin ETFs at The Spot?
Hougan's memo offers a concise response. He said, "A lot of professional investors own bitcoin ETFs." These investors are among the most reputable and significant asset managers in the business; they are not just any investors. For example, Hightower Advisors, which manages $122 billion in assets and is listed as the #2 RIA firm in the US by Barron's, now has $68 million invested in Bitcoin ETFs. Similarly, a significant $434 million has been invested by Bracebridge Capital, a well-known hedge company with headquarters in Boston that looks after endowment funds for universities like Yale and Princeton.
In a recent memo, Matt Hougan, Bitwise's Chief Investment Officer, provided a detailed analysis of the early adopters of Bitcoin Exchange-Traded Funds (ETFs) based on 13F filings with the SEC. This analysis underscores a significant embrace of Bitcoin ETFs by professional investment firms, signaling a potential shift in the landscape of BTC investments.
According to the latest data from last Thursday, notable stakeholders include Cambridge Investment Research with $40 million, Sequoia Financial Advisors with $12 million, Integrated Advisors with $11 million, and Brown Advisory with $4 million in Bitcoin ETF holdings. Collectively, 563 professional investment firms have reported owning a combined $3.5 billion worth of Bitcoin ETFs. Hougan anticipates that these numbers could surpass 700 firms with total assets under management nearing $5 billion by the May 15 filing deadline.
Hougan described this level of professional investor ownership as unprecedented, echoing Eric Balchunas, a senior Bloomberg ETF analyst, who referred to the number of large-scale investors involved in Bitcoin ETFs as "bonkers." Comparatively, when gold ETFs launched in late 2004, they attracted over $1 billion in just five days, but their initial 13F filings showed only 95 professional firms investing. In contrast, Bitcoin ETFs have significantly exceeded this mark right from their initial filings.
Despite the surge in professional interest, Hougan's memo cautions that a substantial portion of the total $50 billion assets under management in Bitcoin ETFs are still owned by retail investors, estimating that professional investors currently account for only 7-10% of all assets. However, he suggested that media portrayal of these ETFs as "retail-driven" funds might overlook a critical emerging trend.
Hougan outlined a typical four-step investment trajectory observed among institutions, starting with a period of due diligence lasting 6-12 months. This is followed by professionals making a small personal allocation before recommending broader allocations to clients. Eventually, this leads to more substantial platform-wide allocations across the entire client book, typically ranging from 1-5% of the portfolio.
Despite these insights, Hougan remains bullish about the future of Bitcoin ETFs, emphasizing that the recent 13F filings are just a starting point. Notably, following the release of Hougan's memo, the State of Wisconsin Investment Board disclosed purchasing $99,167,688 (2,450,400 shares) of BlackRock’s IBIT and $63,687,310 (1,013,000 shares) of Grayscale’s GBTC, marking a significant development for Bitcoin investment.
May 2024, Cryptoniteuae